Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Hope you're doing well. Alas and alack for Venezuela. This is one of those economic/political phenomena that everyone should witness - albeit from afar - just so they can try to avoid it. This is the sort of thing that nightmares are made of and I've never read of one that ended well.
I now have in-laws in Vz and a sil here in the US, all his family are eager to join him, and shall. So I ask questions. And as they are nonwealthy middle-class it becomes clear to an outsider that life goes on there, and middle-class people and families survive, and do what they do, go to their jobs, provide services, earn salaries, deal in the off-markets for sure, and survive if not thrive as they have always done, waiting.
How does this compare with what happened in Zimbabwe few years ago. I thought they had like 1000% inflation. Hope 100,000% was not a typo. Simply mind boggling how anyone can survive!
And let me get this right. When we say 100,000% we are saying over whatever period of time if I paid $1 for a loaf of bread then I will have to pay $100000 for the same loaf of bread?
The US restrictions don't help. Dunno if any other countries are doing to same toward Venezuela. Life goes on, because it has to, but people's lives must be rotten, day-to-day. The US is making things hard for them--- as far as US decisions can--- because they have a socialist regime. Stupid. Sure, there's awful corruption. And bad decisions at their end.
Dear uncle Ted: socialism CAN work. I just love the way some folks hurl the word around as if it were an obscenity. What is really obscene is American style capitalism. The greed at the top is pornographic. Banksters in bed with government, and the revolving door between them. Vomit.
Another way to think of socialism is your social security check, or when medicare takes care of your $20,000 medical treatment. That is an example of socialism too. Is that a bad thing?
Decentralized power, dictatorships, corrupt leadership often grasps the socialist name tag just because that dictator wants total control. That's Venezuela.
The problems in many Latin American nations have little to do with socialism or capitalism and everything to do with corruption and a failure of government institutions to respect the rule of law. If you think Venezuela is bad under a socialist regime, you should examine the history of Chile under the vicious and uber-capitalist Pinochet regime: https://en.wikipedia.org/wiki/Caravan_of_Death One can see a similarly brutal history in Argentina which leans capitalist. Death squads seem to materialize in Latin American countries regardless whether the system is capitalist or socialist. The capitalism of Chile during Pinochet's rule in particular was modeled very specifically after the ideology of Milton Friedman and the Chicago school: https://thenation.com/article/the-chicago-boys-in-chile-economic-freedoms-awful-toll/
What the heck is Social Security and Medicare if not Socialism. We need to freakin' stop branding things and then screwing brands. We have a democracy with Trump as President. It's in the Implementation not just about the Design.
Everyone is fawning over Black Panther. They decided we will have an Advanced Nation in Africa, and what form of Government does it have? A KING. A DICTATORSHIP, but of course it is "benign dictatorship" because it is a Hollywood Movie.
Effed up people can screw up any Effed up government system. Bah!
It's in the Implementation not just about the Design.
Exactly. I have a lawyer friend who recently pointed out that the Russian constitution is remarkably similar to our own with ostensibly the same liberties. Being a lawyer, he noted that it was the failure of the judiciary branch of government to enforce the law and ensure the same protections are afforded every Russian citizen that makes Russia such a backward toltalitarian state. We face the same risk here if our court system becomes completely corrupt. The laws cease to have meaning if they aren’t enforced or equally enforced. In certain regards this is already true for the poor and ethnic minorities in the U.S. who don’t enjoy equal protection under the law. But in countries like Russia and regions like Latin America it is far worse as corruption and graft are widespread.
It's in the Implementation not just about the Design.
Exactly. I have a lawyer friend who recently pointed out that the Russian constitution is remarkably similar to our own with ostensibly the same liberties. Being a lawyer, he noted that it was the failure of the judiciary branch of government to enforce the law and ensure the same protections are afforded every Russian citizen that makes Russia such a backward toltalitarian state. We face the same risk here if our court system becomes completely corrupt. The laws cease to have meaning if they aren’t enforced or equally enforced. In certain regards this is already true for the poor and ethnic minorities in the U.S. who don’t enjoy equal protection under the law. But in countries like Russia and regions like Latin America it is far worse as corruption and graft are widespread.
And in Asia, The Philippines. And I'm not just referring to Duterte.
I do think you guys are displaying a rather shocking ignorance of currency differences for members of a financial web site. The more another country's currency is crushed, the more a visiting American becomes like a king: https://stingynomads.com/travel-venezuela/ In fact, just so long as you could keep all of your original money in dollars and convert them only as needed, you could probably experience what it is truly like to be wealthy in a country like Venezuela right now. That is of course, if you could avoid being kidnapped or robbed as some tourists have experienced in turbulent nations in Latin America. Then again, for a few dollars you could probably hire body guards and be like the 1% in America.
The more another country's currency is crushed, the more a visiting American becomes like a king ...
Just spent a few days in Toronto. The Canadian Dollar was at 78 cents to the U.S. Dollar. A burger delivered to the room (with fries) would have cost $26 (Canadian) - plus a $3.50 service fee - plus a mandatory 15% gratuity. In total ... about $34 for a burger and fries. Needless to say, I passed on the offer.
But, more to LB’s point, in American Dollars that was really only about $26.50.
Some of the prices described in the linked Venezuela article in dollars are absurdly cheap,like being in a time warp: 5 cents for a coke, 42 cents for a pizza and cocktails, $2.40 for a hotel room, $40 for a six-day guided tour all-inclusive.
Makes me almost want to go to Venezuela. I'm headed for Canada myself in about 3 weeks, and will stay 3 weeks. But no hotels. It's a lot easier staying with a classmate. But it's true: everything is expensive north of the border. But the trade-off is: they have HEALTH CARE provided.
@Maurice You disappoint me. Where's your sense of exploitative capitalist adventure? Didn't legendary investors Baron Rothschild and subsequently Sir John Templeton say "Buy when there's blood in the streets?" In Venezuela's case, that's literally true.
@Maurice But surely you recognize that there is no purely Capitalist or Marxist regime, that a thriving black market for capitalist goods exists even in the most ostensibly left-wing countries and now because of the worst currency devaluation imaginable all of those goods can be had for a pittance in Venezuela for those with precious dollars? You could be a kingpin there, a real wheeler dealer! Buy Coca-cola for 5 cents a bottle, then covertly ship it across the border and sell it for ten times that. You should definitely go.
Umm ... I thought it an odd thread to start off with (no disrespect intended). But - Annual inflation running at 18,000% to 100,000%? Why not just flat out say that Venezuela’s currency has completely collapsed? It’s essentially worthless. Zilch! Stuff happens for many reasons that can wreck an economy. War, debt and political corruption among the top contenders. Trying to place the blame on a particular political ideology seems pointless to me.
But I’m intrigued by the question of what the Venezuelan people are substituting for currency in order to survive. I’d imagine it’s pretty much a barter economy with folks exchanging goods and services directly. Some of the better healed might have collectibles, gold, silver, gems, etc. to use as a means of exchange. Bitcoms perhaps in some cases? Or maybe they’ve resorted to the Dollar or some other foreign currency.
And I’m wondering what kind of return investments might possibly render under such circumstances? A stock or bond fund would seem unsuitable for trying to keep up with inflation measured in the thousands of percent per year. So - yes, it’s an interesting topic. Too bad it needs to devolve into an ideological food fight.
My daughter's in-laws there continue to live and work and go about their normal daily lives as best they can, with yes, 'off-market' and bartering activity, I suppose. They hope to leave, like so many. Many there have dual citizenship with Spain or other country. A major problem is selling your real estate and land, if you have such, and being able to get non-Vz currency. Maybe Vz will become an investment opp....
Comments
Hope you're doing well. Alas and alack for Venezuela. This is one of those economic/political phenomena that everyone should witness - albeit from afar - just so they can try to avoid it. This is the sort of thing that nightmares are made of and I've never read of one that ended well.
and so it goes,
peace,
rono
And let me get this right. When we say 100,000% we are saying over whatever period of time if I paid $1 for a loaf of bread then I will have to pay $100000 for the same loaf of bread?
Regards,
Ted
Decentralized power, dictatorships, corrupt leadership often grasps the socialist name tag just because that dictator wants total control. That's Venezuela.
https://thenation.com/article/the-chicago-boys-in-chile-economic-freedoms-awful-toll/
We need to freakin' stop branding things and then screwing brands.
We have a democracy with Trump as President.
It's in the Implementation not just about the Design.
Everyone is fawning over Black Panther. They decided we will have an Advanced Nation in Africa, and what form of Government does it have? A KING. A DICTATORSHIP, but of course it is "benign dictatorship" because it is a Hollywood Movie.
Effed up people can screw up any Effed up government system. Bah!
In fact, just so long as you could keep all of your original money in dollars and convert them only as needed, you could probably experience what it is truly like to be wealthy in a country like Venezuela right now. That is of course, if you could avoid being kidnapped or robbed as some tourists have experienced in turbulent nations in Latin America. Then again, for a few dollars you could probably hire body guards and be like the 1% in America.
come on, and hey now
But, more to LB’s point, in American Dollars that was really only about $26.50.
Umm ... I thought it an odd thread to start off with (no disrespect intended). But - Annual inflation running at 18,000% to 100,000%? Why not just flat out say that Venezuela’s currency has completely collapsed? It’s essentially worthless. Zilch! Stuff happens for many reasons that can wreck an economy. War, debt and political corruption among the top contenders. Trying to place the blame on a particular political ideology seems pointless to me.
But I’m intrigued by the question of what the Venezuelan people are substituting for currency in order to survive. I’d imagine it’s pretty much a barter economy with folks exchanging goods and services directly. Some of the better healed might have collectibles, gold, silver, gems, etc. to use as a means of exchange. Bitcoms perhaps in some cases? Or maybe they’ve resorted to the Dollar or some other foreign currency.
And I’m wondering what kind of return investments might possibly render under such circumstances? A stock or bond fund would seem unsuitable for trying to keep up with inflation measured in the thousands of percent per year. So - yes, it’s an interesting topic. Too bad it needs to devolve into an ideological food fight.